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company outing allowance 2025
Company outing allowance 2025: How to save on taxes!
Is the next company outing just around the corner? Make the most of the company outing allowance in 2025! Find out everything important about the current regulations, allowances, and how you can save on taxes. Plan your unforgettable company party now and find information on our contact page about professional support.
The topic, briefly and concisely
The tax-free allowance of 110 euros per employee for up to two company events annually remains relevant in 2025 as well. Use it to boost employee motivation.
Pay attention to the correct calculation of costs per employee, including VAT and accompanying persons, to make the most of the tax allowance and avoid unexpected tax payments. Accurate documentation is essential.
If the tax-free allowance is exceeded or there are more than two events per year, the flat-rate taxation of 25% is a sensible option to avoid social security contributions. Timely implementation is crucial to avoid additional costs.
Plan your company outing 2025 and make the most of the tax allowance. Avoid tax traps and learn how to get the most out of it!
What is the Company Outing Allowance and Why is it Important?
The Company Outing Allowance allows employers to give their employees tax-free benefits during company events. It aims to enhance the workplace atmosphere and strengthen team cohesion. The correct application of the allowance is crucial for payroll accounting and helps avoid tax back payments. This provides certainty when budgeting for company events. At GoTuro, we know how important motivated staff are, and we’re happy to support you in planning your next company outing to make the most of the allowance.
Definition and Purpose
The Company Outing Allowance enables companies to offer their employees tax-free benefits up to a certain amount within company events. The goal is to improve the work environment and strengthen employee loyalty. This regulation serves as an incentive for companies to invest in their staff while taking advantage of tax benefits. Find details on the tax treatment of company events on the IHK München website.
Relevance for 2025
For the year 2025, it is particularly important to observe the current tax regulations closely in order to apply the Company Outing Allowance correctly. Incorrect application can lead to tax back payments. Adhering to regulations provides businesses with planning certainty and facilitates efficient budgeting for company events. You can read about the latest changes regarding income tax and social security on the Clockin-Blog.
Overview of the Tax Basis
To make the most of the Company Outing Allowance 2025, it's essential to understand the tax bases. These include the legal provisions of the Federal Ministry of Finance (BMF) as well as current case law from the Federal Finance Court (BFH) and the Federal Social Court (BSG). Distinguishing it from other tax-free benefits like benefits in kind is also crucial to avoid mistakes. The IHK Karlsruhe offers detailed information on this.
Legal Provisions and Guidelines
The tax regulations for company events are outlined in the Income Tax Act (EStG). It is important to follow the current guidelines of the Federal Ministry of Finance (BMF) to apply the allowance correctly. Changes in case law from the Federal Finance Court (BFH) and the Federal Social Court (BSG) can also impact the tax treatment. The Haufe-Redaktion provides up-to-date information on this.
Distinction from Benefits in Kind
The Company Outing Allowance is clearly distinct from other tax-free benefits such as benefits in kind. While the allowance for company events is specifically intended for joint activities and staff celebrations, benefits in kind refer to individual benefits like vouchers or gifts. It is important to note that the allowance for company events cannot be used for gifts or other benefits in kind. More information on the correct tax treatment can be found at Lexware.
Make optimal use of allowances: 110 euros per employee is crucial
Current Allowance Amount for 2025
The allowance for company events remains at 110 euros per employee and event. A proposed increase to 150 euros was not implemented (as of 2024). This amount is crucial for planning your company outings as it forms the basis for tax treatment. At GoTuro, we help you make the most of your budget and create appealing excursions that fall within the allowance.
Allowance of 110 Euros per Employee
The allowance of 110 euros per employee and event will continue in 2025. It's important to note that this amount is a cap and should not be exceeded to benefit from tax advantages. An increase to 150 euros has not been decided. The Handwerksblatt confirms this.
Gross or Net?
The allowance of 110 euros refers to the gross amount including VAT. This means that all costs, including VAT, are within this limit. When planning your company event, you should consider this to ensure the allowance is not exceeded. Correct calculation is crucial for tax treatment.
Maximum Number of Tax-Free Events Per Year
The company outing allowance can be used for up to two company events per calendar year. The employer can choose which two events receive tax benefits. This regulation allows for strategic planning, selecting events that offer the greatest value to your employees. At GoTuro, we are happy to advise you on how to optimally design these two events.
Two Events per Year
The allowance can be claimed for a maximum of two company events per calendar year. It is at the discretion of the employer to decide which two events should receive tax advantages. This allows for flexible planning and selection of suitable events. The Haufe editorial explains the details.
Tax Treatment of Additional Events
If more than two company events are held per year, the additional events are subject to tax and must be taxed as wages. However, the employer has the option to tax the wage tax at a flat rate of 25% to avoid social security contributions. This option can be useful to reduce administrative effort. You can find information about the Christmas party as a company event here.
Avoid hidden costs: How to correctly calculate the allowance per employee
Determination of the Total Event Costs
To correctly utilise the company outing allowance, it is important to accurately determine the total costs of the event. This includes all expenses for food, beverages, music, venue hire, travel costs, and gifts. The costs for accompanying persons must also be considered. At GoTuro, we support you in detailed cost planning, ensuring you can make the most of the allowance.
Consideration of All Costs
When determining the total costs, all relevant expenses must be considered. This includes not just direct costs such as food and beverages, but also indirect costs like venue hire, travel expenses, and potential gifts for employees. Costs for accompanying persons (e.g., employees' partners) must also be included in the calculation. The Handwerksblatt provides an overview of relevant costs.
Non-Allowable Costs
Not all costs can be considered when calculating the allowance. Internal costs of the employer, such as personnel department wages or depreciations, are not to be included in the calculation. It is important to exclude these costs to correctly determine the taxable amount. The IHK Karlsruhe provides detailed information on this.
Distribution of Costs Among Participants
The total costs of the company event must be divided among the participants to determine the individual cost share per employee. It is important to note that the costs are divided by the number of actual participants, not by the number of registered participants. Costs for 'no-shows' increase the taxable amount per employee. At GoTuro, we help you distribute costs transparently and fairly.
Division by the Number of Actual Participants
The total event costs are divided by the number of actual participants, not by the number of registered persons. Therefore, if employees register but do not show up, the costs per head for the attending participants increase. This must be considered when calculating the allowance. The Lexware Magazine explains the details.
Allocation of Costs for Accompanying Persons
The costs for accompanying persons are attributed to the respective employee. This means that the cost share for the accompanying person is charged to the employee, affecting their allowance. No additional allowance is provided for accompanying persons. This must be considered when planning and budgeting the company event. Information on ideas for a company outing can be found here.
Ensure tax allowance: Pay attention to eligibility and documentation
Eligibility for Participation
In order to claim the Company Outing Allowance, the Company Event must generally be open to all employees of the company or a department. Inviting former employees, trainees, and temporary workers is also possible. At GoTuro, we ensure that your event meets the criteria so you can make optimal use of the Allowance.
Open Invitation to All Employees
The Company Event must generally be open to all employees of the company or a part of it. This means that all employees must have the opportunity to attend the event. An open invitation is an important prerequisite for claiming the Allowance. The IHK Munich emphasizes this requirement.
Exceptions to Eligibility for Participation
Events intended only for certain departments or hierarchy levels may jeopardize the Allowance. However, there are exceptions: A lump-sum taxation is also possible for non-public events, offering more flexibility in planning. The Wage Information provides detailed information on this.
Documentation and Proof Requirements
Careful documentation is crucial to correctly prove the Company Outing Allowance. A detailed list of participants with signatures is required to verify the actual number of participants. All expenses must be evidenced by invoices and receipts. At GoTuro, we assist you in creating the necessary documentation.
List of Participants
A detailed list of participants with signatures is required to verify the actual number of participants. This is particularly important if not all employees attend all events. The list of participants serves as evidence to the tax office and is an important part of the documentation. Lexware offers a template for this.
Invoices and Receipts
All expenses must be evidenced by invoices and receipts. The receipts must be properly kept to present them during an audit. Comprehensive documentation of costs is essential to correctly claim the Allowance. Information on group travel for companies can be found here.
Avoiding tax traps: How to act correctly if you exceed the allowance
Taxation of the Exceeding Amount
If the costs per employee exceed the allowance of 110 euros, the exceeding amount is subject to income tax. However, the employer has the option to tax the income at a flat rate of 25% (plus solidarity surcharge and church tax). This option leads to the social insurance exemption of the exceeding amount. At GoTuro, we advise you on how to optimally arrange the taxation.
Income Tax Obligation
If the costs per employee exceed the allowance of 110 euros, the exceeding amount is subject to income tax. This means that this amount must be taxed as wages. It is important to consider this when planning and budgeting the company event. The Wage Info explains the details.
Option of Flat-rate Taxation
The employer can tax the wage tax at a flat rate of 25% (plus solidarity surcharge and church tax). The flat-rate taxation leads to social insurance exemption of the exceeding amount. This option can be sensible to reduce administrative efforts and avoid social insurance contributions. The IHK Karlsruhe provides detailed information on this.
Social Insurance Legal Consequences
If flat-rate taxation is not carried out in time (by 28 February of the following year), social insurance contributions become due. The jurisdiction of the BSG must be observed in this context. At GoTuro, we help you meet the deadlines and avoid social insurance contributions.
Social Insurance Obligation for Delayed Flat-rate Taxation
If flat-rate taxation is not carried out in time (by 28 February of the following year), social insurance contributions become due. It is therefore important to carry out flat-rate taxation in a timely manner to avoid additional costs. The jurisdiction of the BSG must be observed in this context. The Haufe Editorial Team explains the details.
Ensure input tax deduction: Be sure to observe the threshold of 110 euros
Input Tax Deduction
The allowance of 110 euros is a tax exemption for VAT purposes. If this exemption is exceeded, the input tax deduction for the entire event costs is forfeited. It is therefore crucial to carefully calculate the costs and not exceed the allowance to avoid jeopardising the input tax deduction. At GoTuro, we support you in optimising the VAT aspects of your company event.
Allowance as a Threshold for VAT
The allowance of 110 euros is a tax exemption for VAT purposes. This means that if this limit is exceeded, the input tax deduction for the entire event costs is forfeited. It is therefore important to accurately calculate the costs and not exceed the allowance to avoid jeopardising the input tax deduction. The wage info explains the details.
VAT Treatment of Employee Benefits
If the costs per employee exceed the allowance, it constitutes private use, which may be subject to VAT. It is therefore important to accurately calculate the costs and not exceed the allowance to avoid VAT consequences. The IHK Karlsruhe provides detailed information on this.
Private Use
If the costs per employee exceed the allowance, it constitutes private use, which may be subject to VAT. This means the employer must pay VAT on the excess amount. It is therefore important to accurately calculate the costs and not exceed the allowance to avoid VAT consequences.
Pay attention to special cases: handle travel expenses and anniversary celebrations correctly
Travel Expenses
Travel expenses incurred in connection with a company event may be reimbursed tax-free under certain conditions. This is especially applicable when the event takes place outside the employee's primary workplace. At GoTuro, we advise you on how to manage travel expenses in the most tax-efficient way possible.
Handling Travel Expenses
Travel expenses incurred in connection with a company event may be reimbursed tax-free under certain conditions. This is particularly true if the event occurs outside the employee's primary workplace. It is important to verify the necessary requirements and correctly document the travel expenses. Information on party trips can be found here.
Anniversary Celebrations
Non-cash benefits on the occasion of a work anniversary may be tax-free up to an amount of 110 euros. However, this is an allowance, not an exemption amount. At GoTuro, we assist you in organising tax-efficient anniversary celebrations.
Gifts for Anniversary Celebrations
Non-cash benefits on the occasion of a work anniversary may be tax-free up to an amount of 110 euros. However, this is an allowance, not an exemption amount. This means that if the allowance is exceeded, the entire amount is taxable. It is therefore important not to exceed the allowance. Information on incentive trips can be found here.
Make the most of your budget: How to efficiently plan corporate events
Budget Planning
Careful budget planning is crucial to making optimal use of the company outing allowance and avoiding unexpected tax payments. All cost factors, including VAT, travel expenses, and costs for accompanying persons, should be taken into account. At GoTuro, we support you in creating a realistic budget.
Realistic Cost Calculation
Careful budget planning is crucial to making optimal use of the allowance and avoiding unexpected tax payments. It is important to realistically calculate all cost factors and consider potential cost increases. Lexware provides helpful tips for this.
Consideration of All Cost Factors
All cost factors, including VAT, travel expenses, and costs for accompanying persons, should be taken into account. A detailed breakdown of all costs is essential to correctly calculate the allowance and avoid unexpected tax payments. You can find information about outdoor team building here.
Strategic Selection of Events
The employer should strategically decide which two events per year should receive tax benefits. The events with the lowest cost per employee should be prioritized. At GoTuro, we advise you on how to optimally select and design the events.
Prioritizing Events
The employer should strategically decide which two events per year should receive tax benefits. The events with the lowest cost per employee should be prioritized. This enables efficient use of the allowance and minimizes the tax burden. Haufe-Redaktion provides valuable information on this.
Allowance 2025: Ensure planning certainty through correct application
More useful links
The IHK München offers detailed information on the tax treatment of company events.
In the Clockin-Blog you will find the latest changes regarding income tax and social security.
The IHK Karlsruhe provides detailed information on the tax treatment of company events.
The Haufe editorial team offers current information on the tax regulations for multiple company events per year.
Lexware provides information on the tax deductibility of company parties.
The Handwerksblatt provides an overview of what employers should consider at company celebrations and outings.
The Lohn-Info provides detailed information on company events.
FAQ
What exactly is the company outing allowance?
The company outing allowance allows employers to provide their employees with benefits up to 110 euros tax- and social security-free during up to two company events per year. The aim is to promote workplace atmosphere and employee retention.
What is the allowance for a company outing in 2025?
The allowance will remain at 110 euros per employee per event in 2025. A planned increase to 150 euros was not implemented.
What happens if the costs per employee exceed the allowance?
If the costs per employee exceed the allowance of 110 euros, the excess amount is subject to income tax. However, the employer has the option to tax the income at a flat rate of 25% to avoid social security contributions.
For how many events per year can the allowance be used?
The company outing allowance can be used for a maximum of two company events per calendar year. The employer can choose which two events are tax-deductible.
What costs can be considered under the allowance?
Under the allowance, all costs for food, drinks, music, venue rental, travel costs, and gifts can be considered. Costs for accompanying persons also need to be taken into account.
Do all employees need to be able to participate in the company event to use the allowance?
Yes, to claim the company outing allowance, the company event must generally be open to all employees of the company or a part of the company.
What should be considered when documenting company events?
Careful documentation is crucial. A detailed list of participants with signatures is required to provide evidence of the actual number of participants. All costs must be substantiated by invoices and receipts.
What is the difference between an allowance and an exemption limit in the context of company events?
The 110-euro amount is an allowance for income tax. Only the amount that exceeds 110 euros is taxable. For VAT, however, it is an exemption limit. If exceeded, the input tax deduction for the entire costs is no longer applicable.
